FACTS Francel Realty

Corporation

executed a Contract

to Sell to Francisco

Sycip a property

(townhouse) in

Bacoor, Cavite.

The Contract states that in case Sycip fails to

pay two or more instalments: :

the obligation will

become due and

demandable;

Francel Realty

would be able to

take possession of

the property

again;

Sycip would vacate

the property

without need for a

judicial order;

and that the

payments made

would be

considered as

rentals for use of

the property in

question.

Sycip was not able

to pay since

October 30, 1990

despite demands

made until

September 26,

1992; he also

refused to vacate

the premises.

• Hence, FrancelRealty filed an action in the MTC of Bacoor to compel Sycip to vacate the premises, pay the monthly rental from the time he failed to do so, and pay attorney’s fees and expenses of litigation.

Sycip claims

that: I stopped paying

the monthly dues

because the

townhouse sold to

me was in a

defective condition I’ve filed a

complaint for “”unsound

real estate business

practice” in the Housing

and Land Use Regulatory

Board (HLURB) (so the

MTC supposedly has

jurisdiction over the

case).

MTC RULING

the answer was filed

beyond 10 days after

the service of summons.

COMPLAINT DISMISSED

for lack of jurisdiction;

it was the HLURB who

had jurisdiction over it. However, Francel

Realty should pay Sycip

moral and exemplary

damages, attorney’s

fees and other costs.

ISSUES

Does the MTC

have jurisdiction

over the

complaint?

Is the award of

damages justified?

RULING

No, the MTC

doesn’t have

jurisdiction

over the

case

The award of damages

was

erroneous.

This case is not a simple one

which arose from the failure

of a lessee to pay the rents

or comply with the conditions

of the lease agreement.

Sycip has a right to stop paying

monthly amortizations IF it was

proven that Francel Realty had,

indeed, failed to develop the

property according to the approved

plans.

Hence, the case essentially

involves the question of w/n

Francel Realty had developed

the property properly &

consequently, has a right to

claim payment from Sycip.

Since the latter had already

filed a case with HLURB, the

petitioner’s recourse should have

been to file a counterclaim in

the HLURB.

On jurisdiction

2. However, the award of

damages was erroneous.

According to the rules

of procedure, a party

may only file a

counterclaim if the

court has jurisdiction

to entertain the claim.

Hence, Sycip’s

counterclaim for

damages should not

have been awarded,

given that the court

never had jurisdiction

over Francel Realty’s

claim from the

beginning.

Even assuming that the MTC had

jurisdiction, however the award of

damages to private respondent must

be disallowed because:

The MTC decision itself stated that the

answer with its counterclaim was filed out of

time or more than 10 days from private

respondent's receipt of summons. In effect,

private respondent did not make any

counterclaim.

Moreover, a reading of the MTC decision

showed no justification for the award of

moral and exemplary damages and attorney's

fees

“The lack of jurisdiction may be raised at

any stage of the proceedings, even on

appeal. It is not lost by waiver or

estoppel.”